These comments are responses
to the questions listed below,
which were generated in regard to the Mark Haveman
Interview of 06-22-2012.

Overview

Mark Haveman,
Executive Director, Minnesota Taxpayers Association, asserts that any
tax reform efforts should focus on structuring the revenue system to
effectively deal with 21st century demographic and economic
realities. He contends that two major themes currently surrounding tax
reform—improving tax fairness and property tax relief—are both
significantly overstated problems and should not be the focus of
reform efforts. Rather, he believes that the combination of broader
tax bases and lower rates through tax expenditure reform is an
important strategy.

He suggests that
the thinking behind local government aids and credits needs to be
revisited, as does the state's rationale for taxing business. Any tax
increase proposals should be conditioned, he asserts, on significant
government reform and redesign to lower the rate of government cost
increases and obtain greater return from the tax dollar.

Response Summary:
Readers have been asked to rate, on a scale of (0) most disagreement,
to (5) neutral, to (10) most agreement, the following points discussed
by Mr.
Haveman.Average
response ratings shown below are simply the mean of all readers’
zero-to-ten responses to the ideas proposed and should not be
considered an accurate reflection of a scientifically structured poll.

1. Retirees will
lower revenue. (7.3
average response) Reform of
Minnesota's tax system is needed to adjust for a drop in income tax
receipts as more workers reach retirement age.

2. Corporate tax
receipts uncertain. (7.1
average response) Reform is needed
to adjust for growing uncertainty of revenue from the corporate income
tax.

3. Tax fairness
overstated. (5.4
average response) Concern over tax
fairness among income groups is overstated and shouldn't be the focus
of state tax reform.

4. Property tax
issue overstated. (5.1
average response) Concern over the
property tax is overstated and shouldn't be the focus of state tax
reform.

5. Broaden the
sales tax. (6.4
average response) The state sales
tax should be broadened to include many exempt items.

6. Confine local
aid to capital projects. (7.8
average response) State aids to
local government should be channeled mainly for capital improvements,
not operating expense.

7. Cut deductions
and credits. (7.4
average response) The state should
move away from "tax expenditures", that is granting tax deductions
that favor particular forms or uses of income, and tax credits that
reward particular behavior.

8. Increase taxes
only with redesign. (7.2
average response) Any tax increases
in 2013 need to be accompanied by significant redesign to get more
value per dollar.

Response
Distribution:

Strongly
disagree

Moderately
disagree

Neutral

Moderately
agree

Strongly agree

Total
Responses

1. Retirees
will lower revenue.

4%

0%

16%

64%

16%

25

2. Corporate
tax receipts uncertain.

0%

8%

16%

56%

20%

25

3. Tax
fairness overstated.

21%

17%

13%

33%

17%

24

4. Property
tax issue overstated.

8%

36%

16%

32%

8%

25

5. Broaden the
sales tax.

16%

4%

16%

36%

28%

25

6. Confine
local aid to capital projects.

8%

4%

8%

28%

52%

25

7. Cut
deductions and credits.

4%

0%

32%

28%

36%

25

8. Increase
taxes only with redesign.

12%

4%

16%

24%

44%

25

Individual
Responses:

Ray
Ayotte (7.5) (5) (5) (5) (7.5) (7.5) (5) (10)

Dave
Broden (10) (10) (7.5) (0) (10) (7.5) (5) (10)

1. Retirees will
lower revenue.
The reason for reform of Minnesota tax system is not the retirement
age but the structure of the tax system to reflect the type of economy
and economic participation today and in the future. It is seriously
wrong to focus the cause of revenue shortage on worker retirement.
Who(ever) coined that idea is way off base.

2. Corporate tax
receipts uncertain.
The issue is not uncertainty; it is making corporate income tax in
Minnesota competitive with not only other states but internationally.
This question also is off base, but the intent is solid if a strong
and objective reform is defined.

3. Tax fairness
overstated.
Fairness must be a factor but is sometimes definitely the primary
focus rather than a key message.

4. Property tax
issue overstated.
All tax sources must be a focus in reforming Minnesota tax structure
to generate revenue in a balanced approach that fits the economics,
business, and citizen income and quality of life in Minnesota.

5. Broaden the
sales tax.
The evolving economy requires that more items be taxed as we become a
more service and product based economy.

6. Confine local
aid to capital projects.
The priority must be capital improvement but not at the cost of
failing to be able to fund public safety and sanitary infrastructure
etc. There must be some flexibility for operating costs to benefit the
public

7. Cut deductions
and credits.
Tax expenditures are recognized as a key area needing reform. That
must be a priority without loss of the idea of the tax structure
(offering) all citizens some form of incentive to do investments or
purchases that will result in opportunity for the citizen and also
benefit the state.

8. Increase taxes
only with redesign.
This is fundamental and must be a primary focus.

Bert
LeMunyon (5) (7.5) (7.5) (7.5) (2.5) (10) (10) (10)

1. Retirees will
lower revenue.
I think more emphasis should be placed on getting more people back to
work, which will increase income tax receipts

3. Tax fairness
overstated.
In order for our citizens to take some interest in how tax money is
spent, perhaps there should be a minimum tax for all who presently pay
no income taxes.

Jim
Lilly (5) (5) (5) (5) (5) (10) (5) (5)

1. Retirees will
lower revenue.
Clearly, it is an issue that needs clearer definition.

2. Corporate tax
receipts uncertain.
Stabilizing revenues is important. However, a reserve banking system
seems to be a better approach.

3. Tax fairness
overstated.
"Fairness" means different things to different people. Usually it
means getting someone else to pay more than you do. It is fueled by a
combination of greed and envy, both of which are very toxic.

4. Property tax
issue overstated.
See 8.

5. Broaden the
sales tax.
See 8.

6. Confine local
aid to capital projects.
By capital improvements I would focus on infrastructure that benefits
the entire state, not just the local geographical area.

7. Cut deductions
and credits.
While deductions (are) economic decisions in the short term, they
definitely have value to create a long-term economy.

8. Increase taxes
only with redesign.
Overhaul of the tax system is a major undertaking. Currently
Minnesota uses the federal tax structure for income taxes, which is
the largest part of revenues. This means that the federal government
should lead in regard to income tax. It will take a bipartisan effort
to revise the tax structure. My personal constraint will be that it
does not increase total taxes. Also, final approval of any tax
changes should be by a popular referendum.

R.
C. Angevine (7.5) (7.5) (2.5) (2.5) (5) (2.5) (7.5) (7.5)

Joe
Lampe (10) (10) (10) (10) (10) (10) (10) (10)

5. Broaden the
sales tax.
There are dozens of unjustified sales tax exemptions.

Chris Brazelton (7.5) (7.5) (2.5) (5) (5) (5) (7.5) (10)

8. Increase taxes
only with redesign.
Just as we need to stop demonizing business, so must we stop
demonizing the working poor. We recognize that many businesses would
not be able to operate and pay workers a living wage; we must also
recognize that those who do not earn a living wage will need subsidies
for housing, food, child care, medical care and transportation in
order to be able to survive, and those subsidies are paid via tax
dollars in a progressive system in which those who benefit the most
from our system pay their fair share. Redesign to improve efficiency
and effectiveness should remain a focus of our government. But let's
be honest about "growth". Much of the growth in federal government
has been due to the high cost of the wars in Iraq and Afghanistan,
wars that have largely been fought by members of the lower and middle
classes.

W.
D. (Bill) Hamm (7.5) (5) (5) (7.5) (0) (10) (7.5) (10)

1. Retirees will
lower revenue.
While this is true it does nothing to address the steady increase in
the spending on Minnesota's "Prison Industrial Complex". This
excessive waste of tax revenue here has resulted in no benefit to
society and has indeed cost us more in health and human services as
well as education and healthcare.

2. Corporate tax
receipts uncertain.
As was said in the discussion, corporations don't pay corporate taxes,
customers do. With that in mind it becomes simple to understand that a
state that increases corporate taxes also reduces corporate
competitiveness of its business community.

3. Tax fairness
overstated.
While it may be overstated it always needs to be a consideration when
the rich and middle class, (the upper 38%), control the tax policy
debates.

4. Property tax
issue overstated.
From property tax comes local control and decision-making. All who are
crying for replacement of property taxes with state monies are
generally calling for an undermining of local control and authority.

5. Broaden the
sales tax.
No, this is Minnesota's most regressive tax because it bites an
ever-increasing percentage of one’s income the poorer you get.

6. Confine local
aid to capital projects.
It fails miserably as a municipal welfare program.

7. Cut deductions
and credits.
There are many fairness issues here.

8. Increase taxes
only with redesign.
Start with an examination of the racist acts we are committing under
the justification behind the present "Prison Industrial Complex".
Attacking people of color 9 times as often for the use of the nontoxic
herb marijuana now accounts for 2/3rds of all drug convictions and
does nothing but undermine these families in ways that further cost
the system far more money.

Ralph Brauer (7.5) (7.5) (0) (0) (0) (0) (5) (0)

3. Tax fairness
overstated.
Anyone who can say, "Their [the highest bracket] burden relative to
income is still equivalent to the middle class and well above lower
income Minnesotans" clearly has no idea of what it is like to live on
$20,000 a year.

4. Property tax
issue overstated.
When the top ten performing school districts in the state are also the
top in terms of property tax base this notion is absurd. Someone's
future should not depend on where they grow up. The inequity in
property tax base between communities and its impact on education is
the issue in Minnesota.

5. Broaden the
sales tax.
It has become comical how those who oppose raising taxes on the rich
and who make legislators sign no new taxes pledges always go first for
the sales tax as a way of increasing revenue. Maybe we need a sales
tax on luxury items, but not on necessities some people already have
trouble affording.

6. Confine local
aid to capital projects.
First, his position is inconsistent with the one recommended below.
Second, from a systemic perspective, state aid should encourage a
variety of new ideas and allow for local decision-making.

7. Cut deductions
and credits.
There is no question the deductions issue has gotten out of hand, but
what one person sees as a necessary social need another sees as pork.
Systemically there are other ways to deal with this problem.

8. Increase taxes
only with redesign.
I read the entire interview twice and still do not understand what
this means in terms of specifics. The devil is in the detail.

Michael Martens (7.5) (10) (10) (2.5) (7.5) (10) (7.5) (10)

1. Retirees will
lower revenue.
The Minnesota income tax system needs to adjust to the fact that
retiring baby boomers may change their state of residence to a low tax
snowbird state. Then use Minnesota services 5-plus months of the year
without paying any income tax to pay for the services they use. The
Minnesota income tax system needs to change to reduce the incentive
for retirees to change their tax residence state to a low income tax
state.

2. Corporate tax
receipts uncertain.
Corporations don't pay taxes. They raise prices or lower wages to
cover the income and property taxes they have to pay. Wall Street does
not care if corporation is located in a high-tax or low-tax state. The
corporation still has to meet the same earnings-per-share and other
earning numbers.

4. Property tax
issue overstated.
In general Minnesota property taxes are reasonable. But there is a
big disparity in property tax rates between types of property. Why
should business pay 3 times the rate homeowners pay? Why should a
small business or a neighborhood business (coffee shop) which is
struggling have to pay its employees have to pay high property taxes
compared to homeowners and businesses in other states (Wisconsin is
1/2 of Minnesota and other Midwest states are 25% of Minnesota)? Also
high property taxes are a major negative for start-up/new businesses
which have no income but still have to pay high property taxes. Under
the discrimination doctrine of disparate impact, the fact that the tax
rate for an apartment is double the rate for a homesteaded house is
racially discriminatory. 60+% of blacks rent. 60+% of white own. So
poor blacks pay high property tax rates to subsidize whites who pay
low rates. The liberals perpetuate the lie that the rent rebate levels
the difference, which ignores the property tax rebates white
homeowners get.

6. Confine local
aid to capital projects.
LGA is a broken system that needs to be eliminated. Only half the
cities in Minnesota get LGA. No one, and I mean no one, can
explain why St. Paul gets $3xx per resident but Minneapolis only gets
$2xx per resident. Some cities get over $400/resident, some about
$100/resident and 50% of the cities get zero.

7. Cut deductions
and credits.
The fewer the tax deductions and credits there are, the fairer most
people think the system is.

8. Increase taxes
only with redesign.
There should be significant state and local government redesign
completed before any taxes are increased. Consolidating all of the
state's Information Technology functions into one department is an
example of good redesign.

Scott Halstead (7.5) (7.5) (0) (2.5) (10) (10) (7.5) (5)

3. Tax fairness
overstated.
Excessive amounts of income have been granted special privileges and
are not taxed.

5. Broaden the
sales tax.
Including internet sales. Consider a higher rate for Internet sales,
as they do not provide Minnesota jobs.

8. Increase taxes
only with redesign.
Perhaps we need a statewide electronic suggestion box. We need a 50%
reduction in the size of our legislature. They need to be paid for
performance and term limits (should be) enacted.

Peter Hennessey (7.5) (7.5) (7.5) (2.5) (7.5) (7.5) (7.5)
(7.5)

1. Retirees will
lower revenue.
The mistake is basing taxes on income rather than consumption.

2. Corporate tax
receipts uncertain.
Corporations do not pay taxes. They pass all of their expenses onto
their customers, or else they burn through their reserves and go
bankrupt. This would not be an issue if taxes were based on
consumption rather than income. Then all sales taxes would be paid by
the last consumer, whether retail or corporate.

3. Tax fairness
overstated.
If taxes are based on income, tax policy is set by the politics of
envy and class warfare, government assumes the role of a predator in
search of the juiciest victims, and everybody loses. If taxes are
based on consumption, government is necessarily a direct partner in
society's prosperity and therefore readjusts its policies and actions
to be pro business, pro prosperity, pro growth -- and everybody wins.
The key fact that everybody misses is that absolutely everybody at all
times directly depends for his income on somebody making a sale, which
is a voluntary, uncoerced transaction between a willing seller and a
willing buyer making a win-win deal. The business owner can't pay his
employees or pay his taxes if he can't sell his product, and the
government can't pay its employees if no tax is collected on a sale
that was not made. Why this simple fact is beyond the comprehension of
most people, especially politicians and government economists, is one
of the great mysteries of our times.

4. Property tax
issue overstated.
Entities with taxation powers must make sure that the property tax is
not just an extortion or protection racket. If you think this is an
unfair statement, consider what we would do if organized crime were to
come around offering "protection." Everybody must live somewhere, and
it is not "fair" or "just" to tax someone's home. Most retirees can
afford to stay in their homes only because it's paid off and the only
expenses left are utilities, repairs and taxes. In a "fair and just"
society government would try to minimize their burden. However I am
not advocating means testing; property taxes simply should be very
low.

5. Broaden the
sales tax.
This should not be as difficult as people make it out to be, even
though there is lot of room for debate and lobbying for favors when
legislators try to draw a line between "basic necessities" and
"luxuries." My personal preference would be to exempt fresh foods but
tax anything processed and canned or boxed, for example. But people
also like granola, yogurt, hot dogs and beer; so yes, there is room
for debate and for some quite arbitrary decisions. There is no
difficulty in accommodating a high level of complexity in the
implementation of a retail sales tax, because practically every
point-of-sale device is computerized and scans a bar code; it's all in
the software.

6. Confine local
aid to capital projects.
Local governments must pay their own way. State aid must be limited to
paying for state mandates imposed on local governments. And of course
there should be very few, if any, state mandates.

7. Cut deductions
and credits.
The craziest concept is "tax expenditure." Deductions for any reason
are not "expenses." We would not be engaged in debate on such stupid
terms if politicians did not think all income belongs to the
government, not to the people earning it; and again, if taxes were
based on consumption rather than income. The government of a free and
sovereign people has no business engaging in social engineering or the
legal authority to use taxes as a tool of social engineering.

8. Increase taxes
only with redesign.
The priority must always be to reduce expenditures, long before
contemplating raising tax rates or imposing new taxes. Government
officials and employees must understand that they have a
responsibility to minimize the government's burden on society, and
therefore use the resources that taxpayers give them in the most
efficient way possible.

Don
Anderson (7.5) (7.5) (2.5) (7.5) (7.5) (7.5) (5) (7.5)

Mary
Rossing (0) (2.5) (0) (2.5) (0) (10) (5) (0)

5. Broaden the
sales tax.
Here is where equity is needed. Why are townships exempt but cities
are not? Many other nonprofits should be paying sales tax and property
tax or at least making a payment in lieu of taxes to cover basic
infrastructure and public safety.

6. Confine local
aid to capital projects.
Public safety is essential. Maintenance of roads is essential.

8. Increase taxes
only with redesign.
Local governments have cut. The State needs to do the same.

Anonymous (5) (5) (7.5) (2.5) (7.5) (10) (5) (0)

Josh
D. Ondich (7.5) (7.5) (2.5) (2.5) (7.5) (7.5) (5) (7.5)

Fred
Morrison (7.5) (7.5) (0) (2.5) (7.5) (0) (10) (5)

Fred
Zimmerman (7) (7) (na) (8) (9) (10) (10) (9)

Tax fairness is
bi-directional. Some of us object to the fact that large segments of
the population pay no taxes at all -- even when their incomes are
significant. Internet purchase should definitely be subject to sales
tax. Extraordinarily lucrative fringe benefits (including retirement
provisions) should also be taxed. In general, we should tax things we
do not want to happen (such as electronic devices that interfere with
school work) and reduce taxes on things we do want to have happen
(such as inheritances where the capital remains employed in an
enterprise that employs people or produces useful things such as
food).

John
Rollwagen (5) (7) (10) (7) (5) (10) (10) (10)

Thoughtful
presentation.

Al
Quie (10) (10) (8) (10) (10) (10) (10) (10)

John
Adams (9) (9) (9) (9) (10) (10) (10) (10)

This was an
outstanding interview. Mark said an exceptional amount in a brief and
clear fashion.

Carolyn Ring (10) (10) (8) (8) (10) (7) (9) (10)

Extensive
overhaul reflecting today's society is needed. How about zero
budgeting for every government department to justify every
expenditure?

Roger Johnson (8) (1) (0) (4) (7) (9) (0) (3)

Jerry Fruin (8) (6) (9) (9) (10) (10) (10) (7)

Terry Stone (8) (8) (10) (5) (0) (5) (10) (5

The Civic Caucusis a non-partisan,
tax-exempt educational organization. The Core participants
include persons of varying political persuasions, reflecting years of leadership in politics and
business. Click here to see a short personal background of each.